The Dubious Basis for a Carbon Tax

Rep Curbelo of Florida has introduced a carbon tax bill even though the House of Representatives have voted 229-180 to oppose any carbon tax legislation. It is clear that no legislation is going to be passed and most likely that Rep Curbelo is simply using his proposalto bolster his campaign for re-election in November.

He has proposed a $24 per ton tax—the social cost of carbon– beginning in 2020 with the proceeds replacing the federal gasoline tax. How did he pick $24 when the estimates often cited range from $15-$150 per ton? It really doesn’t make any difference since the choice is driven by the climate orthodoxy, model estimates and judgments and assumptions by climate advocates. In reality, the social cost of carbon which is reflected in any proposed carbon tax is nothing more than an intellectual exercise that has very little basis in science or empirical facts.

There are two fundamental pieces of information that are needed to make a more accurate calculation of the social cost of carbon. First, it is necessary to know how the climate responds to emissions of CO2. That is how much global temperatures will increase from doubling of CO2– climate sensitivity. The most recent estimate by the IPCC is between 1 and 4.5 degrees C. That is a wide range of uncertainty and underscores how little is really known about the effects of CO2.

The second piece of information is how much of past temperature increases are due to natural variability and how much are due to human activities? Climate advocates assert that humans are primarily responsible for temperature increases over the past 60 or so years. But the results of model runs based on this assumption significantly over-prediction actual temperature increase. Roy Spencer has pointed out that the “pause has caused them a real problem. “They are now coming up with reasons why there has been a “pause” …and spinning it as if it is bad news …. But when they assume that natural climate variations can cause a cooling influence, they are also admitting there can be natural sources of warming”. In other words, the climate establishment is masking its ignorance with more assumptions. But, assumptions are not facts and neither are computer model results.

In addition to these problems, carbon tax proposals attempt to address a very long-time horizon which makes it impossible to know the effects of policies, how they will change over time, advances in technology and most important the extent of any future warming or change. There is also the factthat atmospheric CO2 produces benefits in plant, crop, and forest growth as has been documented by the CO2 Coalition.

Rep Curbelo should abandon election year stunts and look at facts and think seriously about policy. First, he should learn that the US is doing much better in reducing emissions than other countries without subjecting itself to too many overly stringent regulations or energy taxes . Over the past decade for example, the US has reduced emission by almost 12% while Germany one of the greenest and most aggressively environmental counties. Instead of prescribing a carbon tax, the right approach to climate policy is to first become familiar with the actual scientific facts and then adopt incremental policies based on changes in our state of knowledge. That is the proven approach to effective planning when uncertainty dominates.